How much will your pension increase after the 8th Pay Commission? Here is the complete calculation
There is excitement among the existing 50 lakh central government employees as well as around 68.72 lakh pensioners, who are eager to know how much their pension and salary may increase.
Eighth Pay Commission: The central government has taken a major step towards establishing the Eighth Pay Commission. The government has approved the commission's Terms of Reference (ToR). The commission has been given 18 months to consult with central government employees and pensioners and prepare its report.
This decision has created excitement not only among the existing 50 lakh central government employees but also among around 68.72 lakh pensioners, who are eager to know how much their pension and salary may increase.
How will the pension amount be decided?
According to the government's pensioners' portal, there are currently approximately 68.72 lakh pensioners in various departments, including postal, railway, telecommunications, defence, and civil services. The Pay Commission's recommendations calculate pensions based on the Fitment Factor—that is, the previous basic salary is multiplied by a certain factor to determine the new salary and pension.
In the Seventh Pay Commission, this fitment factor was set at 2.57. This means that the new basic salary and pension were determined by multiplying the Sixth Pay Commission's basic salary by 2.57.
How much can the pension increase this time?
The recommendations of the Eighth Pay Commission will be finalized only after the approval of the Union Cabinet, but it is being estimated that this time the fitment factor can be increased from 2.57 to 3.0 or 3.68.
See below for an example of potential pension calculation –
| Old Basic Salary (Rs.) | Fitment Factor | New Basic Salary (Rs.) | Revised Basic Pension (50%) (Rs.) |
|---|---|---|---|
| 40,000 | 2.57 | 1,02,800 | 51,400 |
| 40,000 | 3.00 | 1,20,000 | 60,000 |
| 40,000 | 3.68 | 1,47,200 | 73,600 |
According to Manjeet Singh Patel, National President of All India NPS Employees Federation, pensioners are not just expecting an increase in the fitment factor, but are also demanding resolution of pending issues – such as parity in pension, regular updating of dearness allowance (DA) and anomalies related to medical benefits.
